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51 terms

Texas Real Property

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County Clerk
Person to whom documents/paperwork are delivered. Is the gate keeper who starts the entire process.
Why do we have a recording system?
Allows the public to know the history of property records for all people who have an interest in the property.
What does the recording system do?
1) Protects the individual who owns an interest in real estate (recording establishes priority of interest);
2) Assures subsequent purchasers and creditors as to the status of the title to be sure there are no interests recorded that are superior to theirs.
What problems occur if you don't record your document?
1) Someone else may lay clay to the property;
2) It is important to note, however, that any instrument not recorded is still binding between the parties - but it is not a notice to third parties or subsequent creditors or purchasers of the property and therefore would not be binding against them.
What are requirements for filing a document?
1) Must be the original instrument, not a copy (the signature must be original);
2) Must be in English;
3) Instrument must be properly acknowledged, properly witnessed, or sworn to with a proper jurat;
4) Must be filed in county where property is located;
5) If it is an instrument (deed or deed of trust), must contain a notice on the first page in 12pt bold-face type or 12 upper-case letters and read substantially as follows:
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER LICENSE NUMBER.
What kind of notices does the filing system offer?
Constructive notice and actual notice
What is a constructive notice?
Once the instrument has been properly recorded at the county clerk's office and made public record, the entire world is legally on notice of that interest in the real property. This type of notice is termed constructive and is considered as good as an actual notice because the law requires subsequent purchasers and creditors to search the records.
What is an actual notice?
It exists when the subsequent purchaser or creditor has express information about something - something that reasonable, diligent inquiry and exercise of the means of information would disclose.
What is a chain of title?
Chronological list of all persons who have owned a title.
What is an abstract of title?
List of all recorded instruments associated with the title.
What is the length of time for the county to accept or reject your filing?
24 hours or one business day.
What is a contract?
Legally binding agreement between two people to either do something or not do something.
What are the elements of a contract?
1) Competent parties (legal capacity - no minors or persons with diminished capacity);
2) Legal subject matter (cannot be for illegal use);
3) Consideration (what you are obligated to do, or what you will get out of the contract).
What are the rules of offer and acceptance?
If terms are set, law says an offer may stay open for a reasonable time.
An offer may be removed.
Offer --- $100 --->
<----- $XXX --- Counter offer
Acceptance requires unconditional acceptance of terms.
What are the conditions of an offer?
The person making the offer is called the offeror. The person to whom the offer is made is the offeree.
The offer must meet legal requirements:
1) Communicated to a specific offeree.;
2) Intended to be a serious offer;
3) Definite and certain enough to be accepted by the offeree.
In terms of an offer, what is an acceptance?
The offeree's manifestation of assent to the terms of the offer.
In terms of an offer, what is revocation?
The offeror's manifestation to withdraw the offer.
In terms of an offer, what is rejection?
The offeree's manifestation of non-acceptance of the offer.
In terms of an offer, what is a counter-offer?
An offer made by the offeree to the offeror that deals with the subject matter of the original offer but with some variation in terms.
What are ways the offer may cease to exist?
1) The offeror revokes the offer;
2) The offeree rejects the offer;
3) The death or incapacity of the offeror or offeree.
What is a unilateral contract?
One party makes the promise, the other party completes their half of the contract performance.
Example: Dad pays for the earned As of his child.
What is a bilateral contract?
An earnest money contract in which the seller promises to sell and the buyer promises to buy.
Two promises are made - a promise for a promise.
Example: Buying and selling of real property.
What is the statute of frauds?
Found in §112.004 of the Texas Property Code under TRUSTS.
1) Lease more than one year;
2) Contract for the sale of real property

Sec. 112.004. STATUTE OF FRAUDS. A trust in either real or personal property is enforceable only if there is written evidence of the trust's terms bearing the signature of the settlor or the settlor's authorized agent. A trust consisting of personal property, however, is enforceable if created by:

(1) a transfer of the trust property to a trustee who is neither settlor nor beneficiary if the transferor expresses simultaneously with or prior to the transfer the intention to create a trust; or

(2) a declaration in writing by the owner of property that the owner holds the property as trustee for another person or for the owner and another person as a beneficiary.
What is the parol evidence rule?
Cannot change a contract by oral terms.
What is option contract?
A contract that negates the offeror's power to revoke during the term of the option contract.

Example: Person has interview in distant city, pays money to homeowner to take their property off market for limited time. Negotiations determine if money is refundable, non-refundable or can be used toward purchase of house.

Seller can increase price of house after option contract ends.
How can an option contract cease to exist?
1) Person with interest buys property;
2) Time of option contract runs out;
3) ???
What is the right of first refusal?
A provision in an agreement stating that a specified party must be given an opportunity -- before any others -- to either accept or reject an offer.

Example: Your neighbors owns the vacant lot next to your house, and has agreed to let you have the first shot to buy the vacant lot. Offer comes in from 3rd person, you will be given a reasonable amount of time to make a decision (ie 1 week). Can be an oral agreement but is unenforceable.
In terms of leases, what are the four types of tenancies?
1) Estate for years - Can last for one month minimum. You have a definite term date;
2) Period to period - Set date, doesn't have to be in writing. Can be month to month;
3) Estate at will - Terminable by another party at any given time;
4) Estate at sufferance - Example: Apartment with one year lease. Do not want to resign. You hold over at the old rate instead of the higher rate the apartment wants. Act as the lease is still in effect.
What are the elements of a lease?
1) If longer than one year, it must be in writing and signed by both parties;
2) Must include a specific, identifiable landlord and tenant;
3) Must contain the intent of the landlord to grant to the tenant the right to enter and possess the designated premises for a fixed consideration;
4) Must include an adequate description of the leasehold premises;
5) Must give a specific time of occupancy;
6) Must be delivered and accepted, which is moving in and accepting the keys.
What is the notice period for terminating a lease?
It is the same as your rent paying period unless you have an agreement outside of the lease.
What are the four different types of leases?
Gross, net, month to month, ground.
In terms of leases, what is a gross lease?
A fixed term, fixed amount lease where the landlord pays taxes and maintenance (operating costs).
In terms of leases, what is a net lease?
Tenant pays operating expenses. Pays less rent. The landlord would agree to this to be a passive investor and have a lesser amount of responsibility.
In terms of leases, what is a month to month lease?
An agreement where you pay to stay only one month at a time. Tenant is not locked in for more than one month.
In terms of leases, what is a ground lease?
A long-term leasehold estate that has lease payment provisions similar to those of a gross lease. Meaning landlord pays operating costs of taxes and maintenance.

Example: You don't want to sell your land. They build on your land and lease it for a period of time. The landlord ends up with the building. They get depreciation on the property they build. Owner receives income during the lease.
In terms of leases, what is an assignment?
All rights, title and interest of the original lessee (assignor) are assigned to assignee, who then has a direct privity with the original lessor.

Example: You go overseas to work and your friend is OK'd by the landlord to take over your lease. You are off the hook.

Texas Property Code §91.005
In terms of leases, what is a sublease?
There is still a direct contractual relationship (privity of contract) between the lessor and lessee. There is also a privity of contract between the lessee (sublessor) and the sublessee. There is no privity of contract between the sublessee and the original lessor. This makes the lessee (sublessor) still primarily liable on all obligations to the original lessor.

Example: Your friend moves into your apartment while you are transferred to another location for 6 months. Your friend pays you and you pay the landlord. You are on the hook for damages to the property. Landlords do not like subleases.
What are the duties of landlord to tenant?
1) Quiet enjoyment: The tenant will have an implied covenant of quiet enjoyment in every lease of real estate;
2) Repair: Landlord must fix things that "materially affect the duty and health or safety of an ordinary tenant or water must be 120 degrees";
3) Habitability and suitability: The criteria constituting habitability are lengthy and indefinite. The Texas Supreme Court has held that anything that will render the premises unsafe or unsanitary or or otherwise unfit for living therein;
4) No retaliatory eviction: Any tenant who exercises his rights under the law is protected from retaliatory eviction;
5) Landlord's duty to mitigate: The landlord has a duty to mitigate damages and to use objectively reasonable efforts to fill the premises when a tenant breaches the lease.
What are the duties of tenant to landlord?
1) Payment of rent;
2) Covenant not to damage property.
What are the remedies of the landlord?
1) Suit for damages: In the event the tenant has committed waste of the premises or destroyed property, the landlord has a technical remedy to sue tenant for damages;
2) Specific performance: Landlord has the equitable remedy of specific performance;
3) Landlord's liens: A landlord has lien on all nonexempt property of the tenant - Texas Property Code §54.021;
4) Eviction: Landlord always has the duty to terminate the tenant's right to occupy the premises.
What are the remedies of the tenant?
1) Damages: The tenant has the right to sue for damages in the event of retaliatory eviction;
2) Tenant's lien: The tenant has a judicial lien on all non-exempt property of the landlord as well as on all rent due to the landlord for rental of the premises for any failure of the landlord to comply with the contract;
3) Move out: Tenant may move out from premises.
What are landlords required to provide?
Security devices: §92.151; §92.153.
Deadbolt lock on any exterior door, window latch on all windows, sliding glass door pin, sliding glass door lock.
§92.254 Smoke detector.
What is included and exempt from a landlord's lien?
SUBCHAPTER C. RESIDENTIAL LANDLORD'S LIEN

Sec. 54.041. LIEN. A landlord of a single or multifamily residence has a lien for unpaid rent that is due. The lien attaches to nonexempt property that is in the residence or that the tenant has stored in a storage room.

Acts 1983, 68th Leg., p. 3560, ch. 576, Sec. 1, eff. Jan. 1, 1984.


Sec. 54.042. EXEMPTIONS. A lien under this subchapter does not attach to:

(1) wearing apparel;

(2) tools, apparatus, and books of a trade or profession;

(3) schoolbooks;

(4) a family library;

(5) family portraits and pictures;

(6) one couch, two living room chairs, and a dining table and chairs;

(7) beds and bedding;

(8) kitchen furniture and utensils;

(9) food and foodstuffs;

(10) medicine and medical supplies;

(11) one automobile and one truck;

(12) agricultural implements;

(13) children's toys not commonly used by adults;

(14) goods that the landlord or the landlord's agent knows are owned by a person other than the tenant or an occupant of the residence; and

(15) goods that the landlord or the landlord's agent knows are subject to a recorded chattel mortgage or financing agreement.
In terms of landlord-tenant law, what is a lockout?
You lock a tenant out of the apartment because they failed to pay rent and you want to collect it. You have a 24 hour accessible office or telephone. They don't have to pay you for the key. You just do it so that you can finally get contact with people on the lease.
What are the elements of a mechanic's lien affidavit?
1) Sworn statement - notarized;
2) Name and last known address of owner;
3) General statement of the type of work done;
4) Name of the person by whom the contractor was employed or to whom he furnished the labor. Subcontractor;
5) Legal description of property;
6) Your name and address;
7) Not original contractor? List dates you sent documents to owner and how they were sent.
Why was the law changed to make filing a fraudulent lien document a felony?
The attorney general of Texas, Greg Abbott, noted that there were several fraudulent liens filed against public service officials. These fraudulent liens were costly to those whom they were filed against, and it ties up Texas government resources to remedy or remove these fraudulent liens from public record.
What is forcible entry and detainer?
The eviction process.
1) Landlord must give at least 3 days notice for tenant to leave premises, or amount of days within lease agreement;
2) If tenant fails to move out, landlord can bring suit to JP Court to determine possession (entitled), suit filed 6-10 day period and you show up when it is scheduled;
3) Tenant may show good cause why they need the court hearing postponed - only valid for a 6 day extension.
4) If tenant does not show, judgment is entered;
5) Tenant may appeal within 5 days;
6) Tenant may file a bond;
7) County court - file - then up to 30 days;
8) Can appeal to the district court;
9) File a pauper's affidavit if tenant does not have money.
In which court does eviction begin?
County court
What are the elements of a mortgage?
1) Promissory note: Needs lien within;
2) Deed of trust: Mechanism to foreclose on a house without going to court.
What are the requirements of a deed of trust to make it enforceable?
1) Granting clause - property description;
2) Habendum clause - To have and to hold;
3) Trust clause - giving trustee the power of sale;
4) Must reference promissory note.
What is required before a foreclosure sale?
1) 21 days notice given to homeowner;
2) Must be mailed certified mail to last known address - it is not required to ensure mail is received.